The Financial Times reported, citing experts, that the economies of Europe and Asia will suffer more than the US economy from the US-Israel war with Iran, which has caused a sharp rise in oil and gas prices.
Since the beginning of the war, the price of Brent crude has risen by approximately 30%, and European gas prices by two-thirds. If high prices persist, it will lead to higher inflation, lower purchasing power and slower economic growth in many countries around the world, the Financial Times writes.
Consulting firm Oxford Economics, based on an analysis of the economies of 15 countries, came to the conclusion that Italy will suffer the most in Europe – inflation there could be more than one percentage point above expectations by the end of the year.
In Germany and the United Kingdom, which rely heavily on gas imports, inflation will rise by more than 0.5 percentage points. At the same time, in the United States, according to forecasts, it will rise by no more than 0.2 percentage points.
In addition to European countries, major oil and gas importers from the Persian Gulf countries – India, South Korea and China – will suffer from the war. The Financial Times indicates that China imports about 70% to 75% of its oil consumption. On the other hand, it can increase its imports from Russia.
Countries such as Norway and Canada may benefit, as the Financial Times writes. These are exporters who do not face the same risks as Middle Eastern suppliers.
The United States, which is at war with Iran, has become the largest oil and gas producer in the world. They will suffer less than other countries from conflict in the Middle East, but they are “not immune to damage,” says James Knightley of ING Bank.
“Everyone will be worse off because energy as a major factor of production becomes more expensive,” says David Aikman, head of Britain’s National Institute of Economic and Social Research, a think tank. “But this will have an uneven impact on different countries.”